BBT buying BankAtlantic branches and assets

NEW YORK (AP) -- BB&T Corp. is buying the 78 branches of BankAtlantic, along with its deposits and healthy loan portfolio, for about $5.4 billion.

BB&T, based in Winston-Salem, N.C., says the deal will expand its footprint in South Florida and add to earnings immediately, minus acquisition costs.

The agreement calls for BB&T to acquire $2.1 billion in loans and roughly $3.3 billion in deposits, for a premium of about $301 million, or 9 percent of deposits. The exact premium will be based on deposits at closing, but will not be higher than $316 million.

BB&T is not buying BankAtlantic's non-performing assets, typically loans that are past due and considered in danger of default.

With the majority of its loan portfolio in Florida real estate, BankAtlantic faces severe loan losses that will heavily dent returns for shareholders.

BankAtlantic's ownership structure makes it very difficult for outside shareholders to really have a voice in shaping the company's future.

Loan losses will consume BankAtlantic's thin capital base, forcing the bank to raise more dilutive equity.With the majority of its loan portfolio in Florida real estate, BankAtlantic faces severe loan losses that will heavily dent returns for shareholders.BankAtlantic's ownership structure makes it very difficult for outside shareholders to really have a voice in shaping the company's future.We consider an investment in BankAtlantic highly risky, given the wide variety of possible outcomes, including outright failure. An alternative could be that another bank buys BankAtlantic. However, BankAtlantic's high nonperforming asset ratio could deter potential buyers, since these would have to pitch in more money to keep BankAtlantic afloat in the future. Alternatively, buyers could wait until the FDIC takes over the subsidiary bank and then purchase only the deposits and cherry-pick the assets that are worth keeping.Does this mean that the FDIC took over the Subsidiary bank, or, am I missing something?

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